Americans in nearly every state will fall far short in meeting their economic needs in retirement, finds a report from the National Institute of Retirement Security (NIRS).
The State Financial Security Scorecards report gauges the retirement readiness of future retirees in each of the 50 states and the District of Columbia in three key areas: anticipated retirement income; major retirement costs like housing and healthcare; and labour market conditions for older workers.
The research finds that the lowest ranking states include:
- California due to low potential retirement income, low workplace retirement plan access and high retiree costs.
- Florida due to high retiree costs, low wages for older workers and low workplace retirement plan access.
- South Carolina due to low potential retirement income and low labor market scores.
The highest-ranking states include Wyoming, Alaska, Minnesota and North Dakota due to their relatively strong labour markets and lower retiree costs.
However, each of these states with a favourable outlook is weak in terms of potential retirement income for retirees. For example, North Dakotans have an average DC retirement account balance of only US$27,700— nowhere near the level of accumulated savings required to ensure self-sufficiency through retirement.
“The largest source of retirement income for most Americans is Social Security, but this critical federal program typically provides only a part of the income working families need to be self-sufficient,” says Diane Oakley, NIRS executive director. “State programs must fill the gap and help Americans meet their most basic needs for food, shelter and medicine.”